LONDON (Reuters) - The loading dates of Forties crude cargoes, which help set the global Brent benchmark, have been delayed by at least two weeks and further hold-ups are likely, trade sources said, after the closure of the North Sea Forties pipeline for repairs.
The 169-km (105-mile) pipeline, which carries about a quarter of all North Sea crude output and about a third of Britain’s offshore gas production, has been closed since Monday, following the discovery of a small crack in part of the system onshore in Scotland.
Cargo owners were advised this week of delays to shipments that had been due to load from mid-December, trade sources said. Forties was set to export 21 cargoes of 600,000 barrels each, or 406,000 barrels per day, in December and 20 cargoes in January.
“Probably everybody’s got revised dates now,” a North Sea trader said, adding his Forties cargo had been pushed back by slightly more than two weeks. “I’m sure they will change again and I doubt the cargoes will actually load in those windows.”
The delays are in line with the timeframe that pipeline owner Ineos has given for repairs of two to four weeks. The company, which bought the system from BP in October for $250 million, said on Friday it was still assessing the situation.
“There’s no significant change,” Ineos spokesman Richard Longden said. “The team’s now working through the repair options. We’re trying to get on with that as quickly and safely as we can.”
Ineos this week declared force majeure, which suspends its contractual obligations due to circumstances beyond its control, on Forties deliveries. This is believed to be the first force majeure on a major North Sea production stream in decades.
BP coordinates the Forties cargo-loading program, despite no longer owning the pipeline. A BP spokeswoman said the company was working on the basis of Ineos’ timetable in rescheduling shipments.
“Our plans mirror the communications we are receiving from Ineos, so any question of timing should be directed to them,” she said.
A second trade source also said cargo delays were around two weeks. A third said the two-week hold-ups suggested the pipeline could be fixed and flowing again by Dec. 28, or there was enough crude in storage to load a few cargoes.
Forties is the biggest of the five North Sea crudes that underpin Brent, a benchmark for oil trading in Europe, the Middle East, Africa and Asia.
Brent was trading close to $63 a barrel on Friday. It rallied to a mid-2015 high above $65 on Tuesday in the wake of the outage, which analysts say will lend further support to the market in coming weeks. [O/R]
Editing by Dale Hudson